May 8, 2003 Interim report January-March 2003 Anders Igel President and CEO.

Presentation on theme: "May 8, 2003 Interim report January-March 2003 Anders Igel President and CEO."— Presentation transcript:

1 May 8, 2003 Interim report January-March 2003 Anders Igel President and CEO

2 2 Strong earnings improvement January-March 2003 in brief Implemented efficiency measures are yielding results EBITDA excl. non-recurring items margin 37.2% (30.4) Low CAPEX level Stronger free cash flow No non-recurring costs Operating income excl. non- recurring items EBITDA excl. non- recurring items CAPEX Free cash flow SEK million

3 3 Improved earnings EBITDA excl. non-recurring items SEK +1,590 million, Q1 2002-Q1 2003 Narrowing Carrier losses Consolidation of Fintur Continued strong earnings in Norway mobile Total Improvement in Denmark mobile Other SEK million Lower cost in Sweden mobile Lower cost in Sweden fixed

4 4 Q3 2002 Q4 2002Q1 2003Q3 2002Q4 2002Q1 2003 Decisions and actions in problem areas yielding results International Carrier Restructuring program ongoing Improved EBITDA, lower CAPEX Denmark Turn-around program yielding results Sonera’s Service Businesses Losses almost eliminated International 3G No additional risk exposure Xfera guarantees reduced by 80% SEK million

5 May 8, 2003 Kim Ignatius CFO

6 6 Key figures SEK million (except percentages and personnel) Jan-Mar 2003Jan-Mar 2002Change Net sales 20,349 19,642 +707 Growth in net sales (%) 3.6 n/c EBITDA excl. non-recurring items 7,562 5,972 +1,590 Margin (%) 37.2 30.4 Income from associated companies 23 2,419 -2,396 Operating income 3,227 4,625 -1,398 Operating income excl. non-recurring items 3,227 2,010 +1,217 Income after financial items 2,711 4,674 -1,963 Net income 1,602 3,878 -2,276 CAPEX 1,676 2,653 -977 Free cash flow 3,897 -289 +4,186 Average personnel 26,822 31,587 -4,765

7 7 Net sales SEK millionJan-Mar 2003Jan-Mar 2002ChangeJan-Dec 2002 Sweden 10,486 10,578-9243,381 Finland 4,368 4,201+16717,515 Norway 1,515 1,200+3155,537 Denmark 717 711+62,783 Baltic 1,413 1,512-996,309 Eurasia 558 -+558847 International Carrier 1,492 1,628-1366,861 Holding 570 873-3032,737 Corporate 1 12-1121 Eliminations -771 -1,073+302-5,012 The Group 20,349 19,642+70780,979

8 8 Operating income excl. non-recurring items SEK millionJan-Mar 2003Jan-Mar 2002ChangeJan-Dec 2002 Sweden 2,717 1,916+8018,936 Finland 690 681+92,056 Norway 81 -74+155-42 Denmark -202 -289+87-2,234 Baltic 275 309-341,537 Eurasia 133 18+115-76 Russia 32 4+28-43 Turkey 54 858-804-333 International Carrier -199 -510+311-1,992 Holding -208 -730+522-1,231 Corporate -182 -172-10-568 Eliminations 36 +37-18 The Group 3,227 2,010+1,2175,992

9 9 CAPEX SEK millionJan-Mar 2003Jan-Mar 2002ChangeJan-Dec 2002 Sweden 601 1,122-5214,453 Finland 391 413-222,151 Norway 161 212-511,094 Denmark 74 289-215953 Baltic 132 286-1541,334 Eurasia 225 -+225234 International Carrier 27 198-1711,117 Holding 61 130-69355 Corporate 4 3+119 The Group 1,676 2,653-97611,710 % of net sales 8.2% 13.5%14.5%

10 10 Cash flow statement SEK millionJan-Mar 2003Jan-Mar 2002ChangeJan-Dec 2002 Cash flow from operating activities 5,586 2,326+3,26020,717 CAPEX (cash effect) -1,689 -2,615+926-11,183 Free cash flow 3,897 -289+4,1869,534 Other investing activities 404 1,075-6717,685 Cash flow before financing activities 4,301 786+3,51517,219 Financing activities -5,401 -10,074+4,673-21,889 Change in cash and cash equivalents -1,100 -9,288+8,188-4,670 Net debt reduced by SEK 3,427 million

11 11 Balance sheet SEK millionMar 31, 2003Dec 31, 2002 Change Total assets 198,661 205,370 -6,709 Shareholders’ equity 109,404 108,829 +575 Net debt 34,648 38,075 -3,427 Equity-to-assets ratio 1 54% 52% +2% Net debt-to-equity ratio 1 32% 36% -4% 1) Equity has been adjusted by deducting the proposed dividend. High level of financial flexibility Retaining sufficient long-term liquidity TeliaSonera is one of the best rated telecom operators in Europe

12 May 8, 2003 Anders Igel President and CEO

13 13 Rapid integration of operations Three months after the merger: Strategy in place and communicated One head office established and staffed New divisions of responsibility implemented Profit Centers organized and staffed Competence Centers structure introduced

14 14 Several synergy initiatives taken during the quarter Negotiations with suppliers Elimination of overlaps –Corporate functions –Network resources –MMS platforms –IT software licenses –Roaming agreements Initiatives taken thus far are expected to yield: –Annual cost savings of SEK 436 million by the end of 2005 –Annual CAPEX savings of SEK 127 million by the end of 2005 Synergies ahead of schedule Minor effect during the first quarter

15 15 Continued stand alone improvements Efficiency improvements Sweden –Efficiency programs last year yielding results –Internet Business EBITDA positive –Redundancies announced – Number of job reductions will be determined before summer Finland –Efficiency programs last year resulting in maintained margins in mobile –Redundancy of approx. 400 jobs

16 16 In SwedenIn FinlandIn other operations Enhanced customer focus Consumer segment New offers to counter market share drop Business segment Campaign starting to pay off Large Corporate segment Prestigious business agreements Operators segment Strong growth in fixed voice Consumer segment Several new services Colour services Business segment Single point of contact Large Corporate segment Positive response to pan- Nordic services Operators segment Increased demand for mobile products Norway Several market activities Denmark Market activities planned Baltic's MMS launched in Latvia Eurasia Strong growth Russia Over 600,000 new customers Turkey Retained leading market position Increase market shares - increase market efforts

17 17 Profit enhancement Improving under- performing businesses International Carrier and Denmark improving Stand-alone efficiency improvements Stronger margins – result of successful efficiency improvements Internet Services EBITDA positive Several initiatives of enhanced customer orientation Realization of synergies Synergies ahead of schedule Rapid integration Improved profits and cash flow throughThree months after the merger Profitable growth Enhanced customer focus New offerings and marketing efforts

18 18 Outcome compared with outlook Key figures Group level mid-term targets Revenue Few percentage points growth annually 3.6% EBITDA excl. non- recurring items Increasing margin, approaching 34% 37.2% CAPEX / Sales Few percentage points higher than 2002 (14.5%) 8% Outcome Q1 Increased market efforts will pressure margins Efficiency measures yielding faster results Sustainable mid-term EBITDA margin of 34% expected to be reached sooner Full year CAPEX expected around 2002 level Dividend is doubled this year and stated policy is to increase dividend yearly

19 19 Focus going forward Commercial actions – win back market shares Continued synergy realization Efficiency improvements

20 20 This document contains statements concerning, among other things, TeliaSonera's financial condition and results of operations that are forward-looking in nature. Such statements are not historical facts but, rather, represent TeliaSonera's future expectations. TeliaSonera believes that the expectations reflected in these forward- looking statements are based on reasonable assumptions; however, forward-looking statements involve inherent risks and uncertainties, and a number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statement, including TeliaSonera's market position, growth in the telecommunications industry in Europe, the effects of competition and other economic, business, competitive and/or regulatory factors affecting the business of TeliaSonera and the telecommunications industry in general. Forward- looking statements speak only as of the date they were made, and, other than as required by applicable law, TeliaSonera undertakes no obligation to update any of them in light of new information or future events. Forward-looking statements

21 May 8, 2003 The Nordic and Baltic telecommunications leader